SATS

SATS: Operating data released, DMG maintains BUY: TP $2.54). SATS operating data for 4QFY12 (Jan-Mar12) A traditionally slower quarter compared with 3Q remains encouraging, despite the global economic uncertainty. Grp handled 10.0% more passengers YoY, and 9.6% YoY more flights. However, due to lower consumer demand, especially for electronics and manufactured goods in EU and America, cargo processed declined 2.4% YoY. On a QoQ-basis, all operations recorded a sequential decline, except for the number of passengers handled, likely due to the trend of more passengers opting for budget flights. Strong balance sheet (net cash position of 16.8c/share as at end 3QFY12) and stable cashflows puts it in a good position to ride out any operating challenges while maintaining stable dividends. At current price, SATS is trading at 16.7x P/E (compared with its average of 15x P/E).